Month: February 2023

WASHINGTON—U.S. Senator Chris Murphy (D-Conn.) and U.S. Senator Todd Young (R-Ind.) on Thursday noted growing support for the Workforce Mobility Act, legislation to limit the use of non-compete agreements, which negatively impact almost one in every five American workers. U.S. Senator Tim Kaine (D-Va.) and U.S. Senator Kevin Cramer (R-N.D.) co-sponsored the legislation, and U.S. Representative Scott Peters (D-Calif.-52) and U.S. Representative Mike Gallagher (R-Wis.-08) reintroduced the bill in the U.S House of Representatives.

The Workforce Mobility Act would:

Narrow the use of non-compete agreements to include only necessary instances of a dissolution of a partnership or the sale of a business;

Charge the Federal Trade Commission and the Department of Labor with enforcement, as well as making explicit a private right of action in federal court;

Require employers to make their employees aware of the limitation on non-competes, as studies have found that non-competes are often used even when they are illegal or unenforceable. The Department of Labor would also be given the authority to make the public aware of the limitation; and

Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

Below is a roundup of support from think thanks, non-profits, and advocacy organizations:

“Restricting the use of non-compete agreements is necessary to ensure that hardworking Americans have the freedom to pursue the jobs they want in the professions they have chosen at the wages they deserve,” said John Lettieri, President & CEO of the Economic Innovation Group. “The bipartisan Workforce Mobility Act would restore healthy competition to the labor market and foster a more entrepreneurial and innovative economy to the benefit of all Americans. EIG applauds Senators Murphy and Young and Representatives Gallagher and Peters for their leadership on this urgently needed legislation.”

“Running a rapidly growing business at Steam Logistics, we have seen firsthand how non-compete agreements hurt workers and employers alike, and impede economic growth. They drive talented workers out of industries they’ve developed expertise in and shrink the pool of qualified candidates for employers trying to grow their businesses. The worst part is that non-competes are unnecessary: Employers have many other tools to protect their businesses, such as trade secrets laws and non-solicitation agreements. Saying anyone shouldn’t compete is un-American, and I commend Senators Murphy and Young and Representatives Gallagher and Peters for their legislation to boost competition and strengthen our economy,” said Steve Cox, President, Steam Logistics.

“We need to ensure that all US workers have the opportunity to earn a good life where they live. Work should be accessible, there should be dignity in it, and it should give everyone a shot at prosperity. We applaud the bipartisan, bicameral group of policymakers for coming together to narrow the use of non-compete agreements that helps to deliver on this promise,” said Gabe Horwitz, Senior Vice President for the Economic Program, Third Way.

“The Workforce Mobility Act’s banning of noncompete clauses will have a major impact on new business growth in America. Noncompete clauses have long been a barrier in the way of entrepreneurs, despite the fact that new and young businesses create nearly all net job growth in America. Noncompete clauses or agreements stifle competition, undermine innovation, limit job growth, and restrict wages,” said Victor Hwang, Founder and CEO, Right to Start.

“Non-compete agreements are simply inconsistent with a free, open labor market. They cut wages, reduce mobility and hurt workers. The FTC’s recent efforts show that the political tide is turning against them. Congress can now assert its own power, pass a ban on non-competes and deliver results for American workers,” said Eli Lehrer, President, R Street.

“Non-compete agreements restrict workers from pursuing better job prospects; reducing competition in the labor market and overall economic growth. It’s simple – your previous employers should not be able to stop you from going to a new job. Letting workers decide where and how they use their skills will empower them and create a more dynamic job market for the benefit of all,” said Matthew Darling, Employment Policy Fellow, Niskanen Center.

“Building a 21st-century economy that works for all Americans requires worker empowerment, which requires mobility – the freedom to take a better job or launch a new business,” said John Dearie, President of the Center for American Entrepreneurship (CAE). “By restricting the enforcement of noncompete agreements to only the most necessary of circumstances, the Workforce Mobility Act empowers American workers and promotes a more dynamic and entrepreneurial U.S. economy, to the benefit of all Americans. CAE thanks Senators Todd Young (R-IN) and Chris Murphy (D-CT), and Reps. Mike Gallagher (R-WI) and Scott Peters (D-CA) for their leadership on this critical issue.”

“Corporate abuse of non-compete agreements is a classic example of the reality, understood by economists since Adam Smith, that workers operate at an inherent disadvantage dealing with employers and need help to advance and protect their interests. Blind faith in markets has led inadvertently to a situation where millions of American workers cannot switch to better jobs, which is the opposite of what a well-functioning market would produce. Senators Young and Murphy, Representatives Gallagher and Peters, and their colleagues deserve great credit for doing exactly what capitalism requires: setting rules within which competition will lead to prosperity for American families,” said Oren Cass, Executive Director, American Compass.

“NELP applauds the reintroduction of the Workforce Mobility Act, which would ban non-competes for most workers and, together with the Federal Trade Commission’s rulemaking, would ensure that workers have the freedom to change jobs and the right to seek better pay and working conditions. We urge Congress to quickly pass the Workforce Mobility Act,” said Najah Farley, senior staff attorney with the National Employment Law Project.

“Non-compete clauses strengthen the power of employers at the expense of millions of workers across America. These unfair contracts reduce job market mobility and depress competition among employers for workers’ services, lowering wages and wage growth and impeding new business creation. Banning non-competes across occupations and at all income levels, whether through legislation as the bipartisan group in the House and Senate propose or regulation as the FTC proposed earlier this month, would be a major step in advancing workers’ freedom in the labor market,” said Sandeep Vaheesan, Legal Director, Open Markets Institute.

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(HARTFORD, CT) – Governor Ned Lamont today held a news conference in Hartford to announce a proposal he will introduce during the 2023 legislative session that will cancel overdue medical debts for thousands of Connecticut residents who are struggling to pay their bills.

Based on a model that other governments throughout the United States have used recently, the governor’s proposal calls for the state to invest $20 million in federal COVID-19 recovery funding it received from the American Rescue Plan Act and use those dollars to contract with a nonprofit organization that buys medical debt and eliminates it at a fraction of the original cost. The nonprofit will contact local hospitals and hospital systems directly, purchase entire portfolios of debt owed by eligible households, and negotiate with the hospitals to cancel that debt. There is no application process for eligible households to have their debt canceled. In other jurisdictions that have pursued this strategy, the amount of medical debt canceled for households has ranged from $25 to six-figure amounts. Two-thirds of personal bankruptcies are caused by medical debt.

One nonprofit working under this model states that they have been able to generate more than a one-to-100 return on investment of government dollars. This is because hospitals often sell medical debt for pennies on the dollar.

The Lamont administration estimates that this $20 million investment has the potential to eliminate about $2 billion in medical debt for Connecticut residents – an astounding amount of financial relief for a relatively small investment. The investment will be included as a component of Governor Lamont’s fiscal years 2024 and 2025 biennial state budget proposal, which he will present to the General Assembly next week.

“Several state and local governments have seen significant success at canceling medical debt for their residents using this model, and I think this is absolutely the right way to use this COVID-recovery funding,” Governor Lamont said. “This initiative will not only help Connecticut residents who are saddled with debt financially, but it also lifts the significant emotional toll that this type of debt has on individuals who do not have the means to get out, especially for those who are simultaneously experiencing significant medical problems. This debt erasure will put millions of dollars back into the Connecticut economy and provide an economic stimulus to local communities.”

According to the U.S. Census Bureau, approximately 19% of American households carry medical debt, and the median amount owed is $2,000. Medical debt disproportionately impacts Black and Latino families – 27.9% of Black families and 21.7% of Latino families have medical debt, compared to only 17.2% of White households. About 31% of households with a member in fair or poor health have medical debt, compared to 14.4% of those with no members in fair or poor health. More than one in four households with at least one member with a disability have medical debt, compared to 14.4% of households with no members of disabilities.

Individuals who have their medical debt canceled under Governor Lamont’s proposal will not experience any financial tax burden associated with this assistance because the IRS does not count medical debt canceled via nonprofits as taxable income.

To reduce the chances of medical debt building up again, Governor Lamont is encouraging Connecticut residents to take advantage of a number of no-to-low cost insurance options through qualified health plans under Access Health CT and will seek legislative support for a number of transparency and affordability initiatives. The ultimate solution to this problem is to drive down the unsustainably high costs of medical care, ensure universal access to primary and preventative care, and make sure health care coverage is affordable and easy to access. The governor has called on all parties – including insurers, employers, providers, and consumers – to step up and be part of the solution.

Governor Lamont is scheduled to deliver his annual budget address to the General Assembly on Wednesday, February 8, 2023, at 12:00 p.m. Documents containing the full details of his state budget proposal will be released at that time.

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